Financial planners need to learn about reverse mortgages to benefit clients
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Financial planners need to extend their knowledge of reverse mortgages to cater for clients who are moving into retirement and need access to equity in their home, according to Kevin Conlon, chief executive of the Senior Australians Equity Release Association of Lenders.
Speaking at a Deloitte Actuaries and Consultants media briefing on the growing use of reverse mortgages in the current market, Conlon said financial planners are increasingly looking at reverse mortgages as a financial strategy for their retiring clients in the current market.
A growing number of self-managed super fund retirees and clients are also using reverse mortgages to diversify their risk, under the advice of their financial planners, he said.
Fifty two per cent of new reverse mortgage loans were written by mortgage brokers and financial planners in the second half of 2008, compared to 43 per cent that were written directly by the banks in the same period.
There were more than 2,600 reverse mortgages written in the second half of 2008, down approximately 25 per cent compared to the previous first half of the year. However, the amount held by existing loans grew by 8 per cent in the second half of 2008, and 23 per cent for the entire year.
James Hickey, a partner at Deloitte, said financial planners had a greater level of knowledge about reverse mortgages than an average bank branch.
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